An Alternate Approach to Social Philosophy and Political Economy

David H. Miller

Revision 0.1May 9, 1991

"'Tis love, 'tis love," said the Duchess, "that makes the
world go round." "Somebody said," whispered Alice,"that it's
done by everybody minding their own business." "Ah well,"
replied the Duchess, "it means much the same thing."

Lewis Carroll

I. Introduction

Several decades ago, the British economist D. H. Robertson published a paper entitled "What Does the Economist Economize?" (1). He concluded that the ultimate resource to be economized is "love."

Our purpose is to show that Robertson's idea is central to the fundamental issues of political and social organization. If one wants to understand how a political order, a constitutional structure, or an economic system will actually work, one must understand how effectively it makes use of the limited altruistic impulses available among the members of society. If a society is to avoid widespread misery and suffering, it must make effective use of the existing potential for altruism, and it must not require levels of altruism exceeding that which is available. In short, it must do an adequate job of economizing on love.

Traditional approaches to the basic questions of social philosophy tend to assume either that the supply of altruistic and public-spirited impulses is unlimited or, on the contrary, that such altruistic impulses are simply unnecessary. If a resource is either unlimited or useless, there is, of course, no point in economizing in its use. We will show that in reality altruistic impulses are both real but limited and that the effective use of such impulses is therefore essential to create and maintain any sort of decent human society.

In the next section, we will show both that the human capacity for altruism is limited and also that a limited (but non-zero) capacity for altruism should be expected in any species which has developed the capacity for rational behavior. The following section will consider contemporary attempts to show that altruism is unnecessary and that a decent society can be based on purely selfish motivations. We will show that such attempts fail, and that altruistic impulses are therefore essential to any livable human society.

Finally, we show how the idea of economizing on love can be used to analyze a number of central problems in political economy and social philosophy, ranging from the debate between anarchists and statists to those traditional issues of economics to which Robertson himself applied the idea. Specifically, we show that the market economy, the rule of law, and political constitutions are not substitutes for altruistic behavior but means of effectively using and amplifying the existing potential for altruism.

The term "bounded rationality" has been widely used to capture the idea that human rationality is real yet limited: it is because human rationality is both real and limited that the efficient use of human reason (via the price mechanism, division of labor, etc.) is important. By analogy, we shall refer to the concept we are discussing as "bounded altruism."

Although our discussion is about values and although we believe that it is relevant to normative concerns, our analysis is intended to be value-free and independent of normative commitments.

II. The Reality of Bounded Altruism

By "love" or "altruism" we mean to include not only those acts of individual kindness, caring, or charity in which a single individual helps another specific individual but also all of those motives and actions which could legitimately be referred to as a sense of morality, social conscience, public virtue, civic responsibility, etc. In short, we mean all of those motivations and actions whose ultimate purpose is the well-being not of the self but of other individuals or of people at large.

The term "altruism" has been used by some authors (notably by Ayn Rand) to refer to purportedly altruistic acts whose actual purpose is to manipulate, intimidate, or control others. Rand also used the word "altruism" to denote the philosophical doctrine that self-regarding acts are morally nugatory or evil. While "altruism" in both of these senses does indeed exist, it is not in these senses that we are employing the term.

That the human capacity for altruism is bounded should be obvious. Logically, no one can devote more than twenty-four hours a day to altruistic pursuits, and such pursuits are further limited by physical and biological realities: not even a Saint Francis or Mother Teresa or Thomas Jefferson can devote all of his or her time to helping others or to serving his or her society.

When we recall that our behavior, like every other species, is shaped by evolutionary processes that emphasize personal survival and reproduction, it is clear that we should expect that altruistic behavior, outside the immediate family, will generally involve only a small fraction of most people's time and effort. Natural selection should strongly select against generalized altruistic behavior. The fact that most people do devote most of their time and effort to the needs and interests of themselves and their families is in accord with evolutionary theory.

Yet, despite the preponderance of self-centered (or family- centered) behavior, it is an empirical fact that altruistic behavior does occur. This may seem puzzling, given the strong evolutionary pressures emphasizing personal survival and reproduction. It is not our purpose here to explore all the details of human nature; however, some discussion of how human altruism is, after all, possible is useful in understanding how altruism functions in human societies.

Behavior which benefits another person solely as a means of causing that other person to do something of benefit to oneself is of course essentially selfish behavior. Such behavior is the usual subject matter of economics and is, obviously, not a mystery (and is not subsumed under our definition of altruism).

Altruistic behavior toward close family members (such as one's own children) is also no mystery. Sociobiology has explained such behavior by pointing out that evolution actually promotes the survival and reproduction of genes; since close family members share many genes in common, substantial altruistic behavior toward close family members is favored by evolution.

The problem (and interesting case for social theory) involves altruistic behavior towards individuals who are not close family members or towards society in general. There are three obvious mechanisms that make such behavior possible. During most of human evolution, humans lived in small bands of a few dozen or so people, most of whom were likely related. The evolutionary "command" to help one's relatives was then effectively the same as the "command" to help any people one dealt with regularly: generalized altruism had some evolutionary value to the degree that members of a band were fairly closely related. In modern society in which one is not related to most people with whom one interacts, generalized altruism is no longer selected for by evolution, but the tendency towards generalized altruism may remain as an evolutionary vestige of our social and demographic past.

The second mechanism for generalized altruism involves traits which accompany the human capacity for rationality: reason is man's primary advantage in the natural world and was strongly selected for by evolution. The ability to take the viewpoint of other rational beings and the ability to view oneself as an external object like other things in the external world are both integral and necessary parts of rationality. While it may be logically possible to take the viewpoint of other persons without having any sympathy for their feelings or purposes, it is not easy: sympathy is thus a natural result of rationality. The ability to view oneself as an object brings about the ability to approve or disapprove of oneself in the same way one does other persons or things: the ability to pass judgment on oneself (which in a developed form can become a sense of responsibility, morality, and guilt) is also therefore a natural result of rationality.

Such traits as sympathy and self-objectivity are not directly selected for by evolution: they are (from the viewpoint of natural selection) undesirable side-effects of a trait, rationality, which is strongly selected for by evolution. This sort of linkage or piggy-backing of traits which are evolutionarily undesirable to traits which are evolutionarily desirable is a well-established aspect of modern evolutionary theory (2).

The third mechanism leading to generalized altruism is based on the possibility of "goal displacement," of means being transformed into ends. While the capacity for reason was selected for by evolution merely as a useful means to the end of survival and reproduction, there is always a danger that mere means will be erroneously (from evolution's viewpoint) transmuted into ends in themselves. Human psychology has a strong tendency to do this in general, and one important example is the tendency to treat rationality as an end in itself rather than just a means. Much of morality can be grounded in a general willingness to respect the rational faculty, the ability to make rational judgments and choices, of others as well as oneself as an end in itself (3).

Since all three of these mechanisms which can produce generalized altruism are results of the nature of rationality and of the operation of evolution, the existence of traits which can lead to generalized altruism is not an accidental feature of human nature. We should expect any species with a fully developed capacity for reason to also have some (albeit limited) capacity for altruism.

Note that we are not assuming that there is any direct evolutionary pressure to select traits which are beneficial to society or to the human species as a whole: natural selection in modern evolutionary theory works only at the level of individuals and their genes, not at the level of social groups or species as a whole (4).

Note also that while we have appealed to the evolutionary experience of humankind to explain the human capacity for altruism, all three mechanisms which we have discussed are essentially evolutionary "mistakes": natural selection would weed out these traits if only it could separate them from highly advantageous traits such as rationality and caring for one's kin. It is the imperfections, not the perfection, of natural selection which make possible the generalized altruistic impulses which we will show are necessary to sustain any human society more complex than the simplest kin-based societies.

Understanding the underlying forces behind human altruism can help explain otherwise puzzling aspects of altruistic behavior. For example, suppose that the ultimate motivation for a person's engaging in political activity is that it gives him a better self-image of himself. (We argued above that this ability to objectify oneself and to approve or disapprove of the resulting self-image is a major source of altruistic behavior.) From the viewpoint of achieving socially desirable results, he should devote some time to acquiring information about various possible policies and their results and some time to promotion and execution of the desirable policies. From the viewpoint of promoting his own self-image, however, much less attention to information acquisition may be called for: vigorous, if uninformed, political activity may be fully adequate for feeding his sense of self-esteem, and energy devoted to information gathering may actually show some of his previous efforts to have been wrong-headed, thereby worsening his self-image. To the degree that political activists are motivated by the desire to enhance their own view of themselves, we therefore predict that they will substantially underinvest in information gathering and evaluation: they are likely to prefer action or unthinking rhetoric to careful thought. Surely, this is an accurate characterization of many political activists (5).

Similar considerations show that, because of the complicated motivations behind altruistic behavior, organizations which rely on altruistic contributions must address the underlying motives behind their supporters' altruistic behavior. Organizations such as charities, political parties, etc. which must rely on such altruistic motivations as civic duty or a sense of public responsibility for their support must provide their supporters with personal rewards, such as a sense of participation, a sense of self-worth and importance, etc. Simply showing that the organization is effective in achieving its official goals is unlikely to satisfy the underlying needs and desires which produce its supporters' altruistic behavior.

The most common error concerning altruism is to assume that its quantity is unlimited. Traditional welfare economics, while assuming that market participants responded to purely selfish motives, paradoxically assumed that political actors (bureaucrats, politicians, voters, etc.) were motivated solely by a concern for the common good, needing only the wisdom purveyed by economists to maximize social welfare. Socialists and communitarian anarchists have been more consistent, assuming an unlimited supply of altruism on the part of all members of society. Both common sense and our theoretical discussion in the previous section show that such assumptions of unlimited altruism are false.

However, a small group of writers, largely libertarians and free-market economists, have taken the opposite approach of arguing that altruistic impulses are completely unnecessary to create and maintain a viable and humane society. The central problem with which these writers must deal is illustrated in the work of a group of public-choice economists headed by Gordon Tullock.

Two decades ago, Tullock and his colleagues published a collection of papers applying public choice theory to societies without governments (7). Using the assumption of universal selfishness and making reasonable assumptions about the costs of predation and of protection against predation, they concluded that life in a society without government would be one of unrelieved misery in which people constantly and systematically preyed upon each other.

Somewhat later, Tullock by himself published a book presenting a parallel analysis of societies controlled by governments which similarly showed that life in a society which does have a government must also be one of unrelieved misery (8).

Government or anarchy, the result is misery either way. The nub of the argument is that either the members of the government itself in a statist society or the strongest individuals in a non-state society will find that they have the power to engage in systematic predation against everyone else. Since no one has any sort of altruistic motives (sympathy, justice, etc.), the powerful will exercise their power and the result will be ongoing terror and misery.

This analysis is basically the same as Thomas Hobbes' but with the additional twist that the same result is shown to occur under a system with government as occurs in the Hobbesian state of nature.

Remember that these conclusions follow from the assumption of unrelieved self-interest and a total lack of altruism in society. One obvious way to avoid these conclusions is to recognize that altruism does in fact exist. However, a number of theorists, including some of the public choice theorists themselves, have attempted to escape these conclusion while maintaining the assumption of a complete absence of altruistic impulses (9). We will see that all these attempts fail.

At present, there are three major theoretical approaches which seriously argue that a decent society can be based solely on selfish, non-altruistic impulses. These three approaches are repeated-interaction theory, social evolutionism, and constitutionalism.

Repeated-interaction theory recognizes that unscrupulous or criminal behavior may pay in a single encounter between a criminal and his victim but argues that social cooperation can evolve from the fact that in the real world social interactions are commonly not one-shot affairs. Usually, we expect to deal with someone several times. If we are cooperative today, this may encourage him to be cooperative tomorrow; if we are exploitative today, that will surely encourage him to be nasty tomorrow. In a world where people interact with each other on a repeated basis, this approach argues, they have good reason to learn to get along with one another.

This idea of repeated interaction as a basis for a decent society goes back decades, but the approach has recently been sharpened by empirical and theoretical investigations by Robert Axelrod of a problem in game theory known as the Prisoners' Dilemma (10). The name of the problem comes from a little story about two prisoners, each of whom has to decide whether to inform on the other to the police or to protect the other by refusing to give information to the police.

The Prisoners' Dilemma is a favorite of contemporary social philosophers; it is a simplified version of all those situations in which it would be convenient for everyone if everyone worked together but in which each individual has an incentive not to take responsibility himself and instead take advantage of others' altruistic behavior. Assuming that the two "prisoners" are solely interested in their own well-being and have no altruistic impulses and that the "game" is only played one time, one can show that both individuals will inform on each other to their mutual disadvantage. However, if the "game" is repeated multiple times, Axelrod showed that it is in each individual's self- interest to cooperate with others who have shown themselves willing to cooperate in previous rounds. Axelrod has demonstrated this result both with computer trials (he actually ran a computer "tournament" among game theorists) and through mathematical analysis.

The sophisticated analyses of multiple Prisoners' Dilemma games thus arrive at the same conclusion as the common-sense argument of the theory of repeated interactions.

As an explanation of why people are ordinarily decent to those with whom they have an ongoing business or personal relationship, this approach makes good sense; it is basically a careful analytical statement of what ordinary people have always known.

But as an approach to showing that altruism is not necessary for human society and that social order and well-being can result solely from self-interest, it is inadequate (11). There are two obvious ways by which would-be exploiters of other people can free themselves from the restraints which encourage cooperation in situations of repeated interaction (or in repeated playings of the Prisoners' Dilemma game). First, exploiters can arrange that their interactions with their victims are not repetitive affairs: an intelligent burglar may avoid burglarizing the same house multiple times because he suspects that the owner will not be as cooperative in the future (e.g., the owner may subscribe to a security alarm service or may buy a gun). Second, the exploiter may look for or arrange situations in which even though repeated interactions cause his victims to be hostile and uncooperative, the exploiter still gains what he wants (in terms of the terminology of game theory, he chooses games in which the pay-off matrix is not a Prisoners' Dilemma matrix): obvious possibilities are singling out defenseless victims or bringing irresistible force to bear against a victim (e.g., by aggressors banding together in gangs).

Simple observation of the world should prove that self- interest in a context of repeated interactions is not sufficient by itself to produce a peaceful and humane society. If it were, we would already have a world free of tyranny, war, and crime. (Some proponents of this view have argued that the problem is that people simply are not yet educated enough to understand the logic of Axelrod's analysis and so continue being nasty. But is it really plausible that the evil committed by Stalin or Hitler was simply due to their failure to understand all of the ramifications of the theory of games?)

If social order and harmony cannot be generated simply from the repeated interactions of purely selfish persons, perhaps social order and harmony can be created from the overall evolution of society as a whole. This use of social evolution as providing the basis for a humane society goes back to Herbert Spencer; its most prominent contemporary exponent is F. A. Hayek (12).

The strength of social evolution theory lies in the fact that it does help explain a number of beneficent institutions of human society: human language, for example, has evolved through the largely unconscious and unintentioned acts of millions of different people who did not have any plan or commitment aimed at bringing about the various languages which humans use today.

However, social evolution does not provide a means for escaping the Hobbesian dilemma which Tullock and his colleagues predicted for a society based solely on self-interest.

First, if social evolution is taken to refer to survival of the fittest among different societies, it is not likely to lead to humane, decent, and peacefully ordered societies. Sparta, after all, triumphed over Athens; totalitarian countries have defeated freer countries: societies which are the "fittest" in terms of survival need not be decent or free societies.

Fortunately, there is little reason to think that history is driven by natural selection among different societies. Just as biological natural selection works at the level of individual organisms, not species as a whole, so also social evolution is more likely to work at the level of internal contests between members of a single society rather than external conflicts between societies. Just as biological individuals reproduce and die more rapidly than species produce new species or become extinct, so also individual persons change their social position and are replaced by the succeeding generation at a faster pace than societies as a whole are replaced or eliminated by other societies. In general, selective pressures work more strongly when rates of change (i.e., mutation) and reproduction are greater. Since these rates are faster for individual organism than for species as a whole and also faster for individual persons than for society as a whole, we expect selection to function at the level of individuals in both the biological and the social realms, not at the level of collective groups, whether societies as a whole or species (13).

However, the fact that social evolution proceeds primarily among the members of a single society does not imply that such evolution will lead to a humane or decent society. For, as Hayek himself has pointed out, ruthlessness is often of great advantage in social contests: the result of social evolution may well be, in Hayek's own phrase, that "the worst get on top." Social evolution does not avoid the Hobbesian dilemma; indeed social evolution helps explain the cruelty, brutality, and evil which have too often characterized human history.

Hayek has actually bitterly condemned altruistic impulses-- roughly, what we call altruism he refers to as "solidarity" and "altruism"--as a positive evil (14). He argues that while altruism was a beneficent aspect of human society in the pre- civilized era of small tribes or bands, it is a positive threat to modern technological, industrial society which can only be maintained through the impersonal, abstract, non-altruistic mechanisms of the market economy. The large grain of truth in this contention is that the motives which can produce altruistic behavior can also lead to catastrophically destructive behaviors: human traits which can lead to altruism have been horribly perverted by Nazism, nationalism, and Communism, and altruistic impulses have also led to counter-productive and sometimes tragic policies in the capitalist democracies. Nonetheless, if we are correct that altruistic impulses are the only viable mechanism for avoiding the Hobbesian dilemma and creating a decent society, then the dangers that Hayek points out are not sufficient reason to reject and condemn altruistic impulses as such. Hayek's own life illustrates our point: would anyone devote his life, as Hayek himself has done, to opposing Nazism, Communism, and other collectivist evils if they were not motivated by some sense of social altruism?

Perhaps social evolution can lead to a humane and decent society if individuals' actions are constrained by a set of rules that prevent people from benefiting themselves by engaging in ruthless and unscrupulous behavior. Hayek's own most recent thought has moved in this direction, but the most consistent developers of this approach are the public-choice constitutionalists led by James Buchanan. Their idea, which has roots in the constitution-designing efforts of the founders of the American republic, is that a properly designed constitutional order can arrange that people, in pursuing their own self- interest, will in fact pursue the common good (15).

The idea that an appropriate system of rules can cause self- interested activities to serve the ends of social order is both important and true. However, this idea cannot serve as a basis for a society in which self-interest alone leads to social order and well-being. The problem is that self-interest alone is able neither to create nor to preserve the basic system of constitutional rules itself.

No one has ever designed a constitution that is self- enforcing. Most constitutions in the world today are largely meaningless pieces of paper; even in the United States, the most constitutionalist of nations, the Constitution is often ignored when it proves inconvenient (the Ninth and Tenth Amendments are, for instance, almost totally ignored). Only motives that go beyond self-interest--patriotism, public-spiritedness, a passion for justice and liberty, etc.--can give effect to a constitution. As we will discuss in the next section, a constitution may help in making effective use of the altruistic impulses which do exist in a society. But it cannot supplant the need for such impulses.

Even if a self-enforcing constitution were possible, the issue of creating the constitution in the first place would remain. Before the constitution is in place to cleverly direct self-interest in socially desirable directions, what motive or mechanism will cause purely self-interested people to erect the constitution itself? Again, the process can only be started through the contribution of altruistic impulses. Both the origin and preservation of a constitutional order require motives which transcend self-interest.

Therefore, neither repeated interaction theory nor social evolutionism nor constitutionalism succeed in refuting the conclusion of Tullock and his collaborators: a society based purely on self-interest and totally void of any public-spirited commitment to justice, freedom, or decency will be a society of misery, brutality, and murderous conflict.

The reason we are not condemned to live in such a Hobbesian society is simply that the premise of Tullock's and his colleagues' analysis, the premise that people act solely from selfish motives and that altruistic impulses are non-existent, is not true of the real world. The reality of bounded altruism offers an escape from the Hobbesian dilemma--if, and only if, that bounded altruism is used effectively.

IV. The Use of Altruism in Society

In the previous section, we showed that altruism is necessary to create or maintain any sort of decent and humane society. Because altruism is limited, a humane society must make effective use of the existing potential for altruism and must not require levels of altruism exceeding that which is available: society must economize on love. Before showing how societies can effectively utilize altruistic impulses, we need to dispel some possible misconceptions.

By referring to the economizing of love, we may be seeming to imply that altruism is an economic good to which all of the standard tools of neoclassical economic analysis can be straightforwardly applied. Such an impression would be misguided.

Love is not an economic good which can be bought and sold (although, notoriously, the imitation of love can be). Because altruism is not subject to market exchange, no quantitative value can be assigned to it. Nor is altruism a homogeneous, fungible thing: the love a mother feels for her children cannot be simply translated or converted into the sort of altruism involved in civic responsibility. It would perhaps be more accurate to refer to many "altruisms" rather than to altruism per se.

While it is important to our argument that altruism is limited, it is also mistaken to reason as if there were a definite fixed amount of altruism in existence. Altruistic motives and actions depend on actual circumstances and social situations; some occurrences and some ways of organizing society may evoke altruistic behavior that would not otherwise occur. In comparing different forms of society in terms of their use of altruism, it is necessary to consider the degree to which they actualize the underlying potential for altruism.

Although it is important that societies make effective use of their potential for altruistic behavior, it is probably not meaningful to ask whether they make optimal use of altruism, where "optimal" is used in the standard neo-classical (Paretian) sense. The concept of altruism involves interpersonal dependency of utility; it is notoriously difficult to apply standard neo-classical analysis in such cases.

Gordon Tullock has actually attempted to make an empirical estimate of the fraction of the average person's behavior which is selfish versus altruistic: he concluded that on average people were about ninety-five percent selfish and about five percent altruistic (16). Deciding which actions are actually other- regarding, deciding what weights to attach to each action, and the actual empirical problem of making the necessary measurements makes it impossible to have any reasonable accuracy in calculating such a number. Nor would it have much value given that altruism is not a homogeneous lump sum. (In fairness to Tullock, he is aware of these limitations; his numerical estimate was not intended as a serious exercise in econometrics.)

The economic use of the potential for altruism in society is not primarily an issue of using the limited quantity of altruism for the most valued purposes. Rather, the task is primarily to create a set of social institutions and a pattern of expectations and behavior which avoid the need for altruism when that is possible and which amplify and magnify the effectiveness of altruism where it is needed. This social patterning and articulation of altruism is what is often referred to as "community": metaphorically, community is related to altruism as the economy is related to self-interested behavior (17). Note that altruism is needed to create and preserve the structures of community as well as being used within the structures of community once those structures exist. This dual role of altruism avoids one of the problems of relying solely on self- interest which we discussed in the previous section: while a constitutional system can make use of self-interest, self- interest cannot create and maintain a constitution.

One important use of the concept of bounded altruism is suggested in our earlier discussion of constitutionalism. While it is not possible for any constitutional structure to eliminate the need for motives of civic responsibility, patriotism, a passion for justice, etc., a system of rules can reduce the demands made upon citizens in maintaining a decent society. In the absence of rules, each individual situation must be judged separately, weighing all of the details involved in that case. A system of rules enables citizens to concentrate simply on the issue of whether or not the rules have been adhered to or violated in this case: if the rules are intelligently chosen, this should require much less effort than passing judgment without rules. For example, it is much easier to judge whether the rule upholding freedom of religion has been violated than it is to decide whether the religion in question is true. Whether or not rules exist, some demand is made upon the sense of responsibility and involvement of the citizenry, but rules can greatly reduce that demand.

Not only can the mere existence of rules economize on people's capacity for civic virtue, but one particular system of rules may well make fewer demands upon and more efficient use of such virtue than another system. For example, under a system of democratic socialism, in which all activities are part of the public sphere, the time and attention which a responsible citizen must devote to public affairs is likely to greatly exceed his capacity for civic virtue. Under a system of private property and a market economy, citizens can concern themselves primarily with their own personal affairs; since only a small number of matters enter the political arena, the demands on citizens' sense of civic responsibility will be much more easily met. A market system more effectively economizes on altruistic impulses than does a democratic socialist system.

If men were angels, with infinite capacity for altruism (and infinite knowledge and wisdom), there would be no economic advantage to a market economy over socialism. It is the reality of bounded altruism (and bounded rationality) which provides the basis for the economic argument for market economies.

The dispute over anarchy versus limited government can also be clarified by the concept of bounded altruism. As we have discussed, in the absence of any altruistic impulses, either anarchy or limited government will lead to general misery. Altruistic impulses are therefore needed; the question is whether a system of anarchy or of limited government makes more effective use of these impulses (18).

A society with a government concentrates great power in a single center. A non-government society disperses smaller amounts of power among a number of different centers. In the event that power is employed for oppressive purposes, a governmental system will therefore place greater demands on the citizenry's willingness to resist oppression (perhaps to risk their lives) than does anarchy.

On the other hand, the information costs of monitoring the behavior of a single government will tend to be smaller than the costs of monitoring the behavior of many power centers in a polycentric anarchy. In this respect, anarchy places greater demands on the citizens' altruistic impulses than does government.

In one respect, anarchy economizes better on altruistic impulses; in the other respect a governmental system does better. No clear decision between the two is obvious. However, we can show how the relative position of anarchy versus government is affected by advancing technology.

As technology advances, information costs are lowered, but the potential power of large organizations is dramatically increased (e.g., by the existence of nuclear weapons). Thus, technological advance reduces the demands which anarchy makes on the citizens' vigilance and increases the demands which a governmental system makes on the citizens' vigilance.

In terms of "economizing on love," the advance of technology shifts the balance away from a governmental system and towards anarchy. While the concept of bounded altruism may not give a simple resolution to the anarchy versus government debate, it does allow us to show that the advance of technology strengthens the case for anarchy and weakens the case for government (19).

The debate between anarchists and statists has generally been fruitless because both sides have been able to "prove" that the other's approach is not feasible--by assuming of course that people act solely from self-interested motives. By recognizing that neither anarchy nor government can lead to a humane society without relying upon the civic virtue of the people, the debate can move forward to the real issue: which system better encourages and utilizes those "republican virtues" which are essential to any just and free society (20).

Another application of the concept of "bounded altruism" is given in a separate paper which analyzes the development and operation of a judiciary system in a free society (21). We show there that a mature court system which more effectively serves the need for justice than government monopoly court systems will develop in a free society without any collective society-wide action--provided that there is general (not necessarily universal) support for human rights in that society. The assumption that a good number of a society's members are willing to make some efforts to support individual rights, a specific example of bounded altruism, is necessary to show that the court system will develop.

As a final and more mundane example of bounded altruism, we turn towards the small-scale aspects of social organization. The development of technology and business has taken many functions that were once outside the structure of the market economy and shown that these can be provided by the market (insurance, old age pensions, etc.). Economists have shown that many services not currently provided by the market (postal services, roads, etc.) could be efficiently provided by the market. Nonetheless, there are some desirable activities which cannot be provided solely through market mechanisms relying on pure self-interest. Charity for those unable to help themselves and national defense are the most obvious examples, but also included here are all of the little examples of kindness, support, and assistance that ordinary people provide each other in the normal course of life. By turning over those functions which can be effectively handled by self-interest to the market, people's natural potential for altruism is left free to deal with those human concerns for which it is truly necessary.

V. Conclusions

Before economics was separated off from the general study of human action in society, political economists such as Adam Smith and David Hume considered the study of the origins, nature, and social function of altruism to be part of the general study of human action; economics was part of "moral philosophy." In analyzing certain narrow issues of economics, the simplifying assumption that people are totally selfish may be appropriate. However, in the study of the general political, social, and economic structure of human society, this assumption will lead to false or absurd conclusions. That altruistic behavior is a relatively small part of human behavior is no excuse for ignoring its importance: economists especially should know that it is scarcity which often makes something valuable and important. Though altruistic behavior may be a relatively small part of human behavior, it is in fact of central importance to the operation of human society.

In the quote from Lewis Carroll which begins this paper, the Duchess is wrong to suggest that love is the same thing as everybody minding his own business. Yet the two are intimately connected. It is altruism in the broad sense which can make possible a society in which people are free to peacefully pursue their own business. And it is a society in which people are free to pursue their own business which enables them to concentrate their altruistic motives in the areas in which love is really needed.

ALL RIGHTS RESERVED--Except for a single copy for personal use, this paper may not be reproduced in any form or in any medium without permission of the author: David H. Miller, 9 Adler Circle, Sacramento CA 95864.

2. For a detailed discussion of how developmental and structural constraints generally prevent natural selection from achieving "optimal" results, see Stephen Jay Gould, "The Evolutionary Biology of Constraint," Daedalus, Vol. 109, no. 2 (Spring 1980), pp. 39-52. For a general argument that evolutionary explanations are always incomplete unless they include a detailed understanding of the fundamental laws and mechanics of the entities that are evolving, see Richard Swinburne, The Evolution of the Soul (Oxford: Oxford University Press, 1986), pp. 184-186. Both Gould and Swinburne are Darwinians: their point is merely that while the concept of natural selection is a tool that can help lead to explanations, natural selection is never a complete explanation simply by itself.

3. For a detailed development of moral theory based on the concept of respect for rationality see Alan Donagan, The Theory of Morality, (Chicago: University of Chicago Press, 1977).

5. After completing this paper, I found a similar analysis by Gordon Tullock of relative underinvestment in information gathering by contributors to charities, in his "Information Without Profit" (1966) reprinted in his The Economics of Wealth and Poverty (New York: New York University Press, 1986).

6. For a discussion from an alternate perspective which also shows that altruism must be taken into account in any adequate description of human society, see Jane Mansbridge, "Self-Interest in Political Life," Political Theory 16 (February 1990) pp. 132- 153.

7. Gordon Tullock, ed., Explorations in the Theory of Anarchy (Blacksburg, Virginia: Center for Study of Public Choice, 1972).

9. The simplest way out of this Hobbesian dilemma would be for the world to be such that the costs of predation were sufficiently high and the costs of protection sufficiently low that predation was simply not worth it and social cooperation and harmony resulted solely from self-interest. Such a theoretical possibility is in fact allowed in the public choice theorists' analyses. In such a world, criminals would always be caught or deterred; tyrants would always be overthrown. Unhappily, this is clearly not the real world. The fact that criminals and tyrants often prosper shows that the costs of predation and protection in the real world are not such as to automatically produce cooperation.

10. Robert Axelrod, The Evolution of Cooperation (New York: Basic Books, 1984). Axelrod himself is relatively modest in his claims for the general implications of his work; he should not be held responsible for the misuse and misstatement of his work by other theorists.

11. For an example of a libertarian theorist who uses Axelrod's work to argue for the possibility of a decent society based solely on self-interest, see Jan Narveson, The Libertarian Idea (Philadelphia: Temple University Press, 1988), pp. 140-144. Narveson also bases his argument (in an approach he attributes to David Gauthier) on a redefinition of "rational," so that some actions which we describe as altruistic are redefined by him as rational self-interest in the new sense of rational. Despite our argument in the previous section that there is a natural connection between rationality and altruism, we view persuasive redefinitions such as Narveson's as confusing if not deceptive.

12. F. A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1960) is the classic presentation of his social evolutionism.

13. For an elaboration of this argument, see David Ramsay Steele, "Hayek's Theory of Cultural Group Selection," Journal of Libertarian Studies 8 (Summer 1987): 171. The argument against group selection is actually stronger than we or Steele have stated it. ("Group selection" refers to any situation in which some trait is selected for because it provides some advantage to the group as a whole even though the trait does not provide a direct advantage to the individual who exhibits the trait.) Even if groups (for example, firms in a highly volatile industry) should dissolve and re-form at a greater speed than the speed at which individuals themselves change or reproduce, selection at the individual level will still tend to dominate over selection at the group level if the newly formed groups are simply a reshuffling of the same individuals as before. Groups are, after all, constituted of individuals: the behavior of groups can change only if the behavior of the individuals making up the groups changes.

For this reason, the only two plausible mechanisms yet suggested in evolutionary biology for group selection are based on the assumption not of a reshuffling of individuals among groups but of actual failure to survive or reproduce among the individuals making up the less successful groups (relative to individuals in more fit groups). The further assumption is required that natural selection among individuals within a group be somehow suppressed; else selection among individuals will overpower group selection pressures. One means of suppressing natural selection among the individuals within a group is to periodically kill off almost all members of a group except a privileged few that are allowed to reproduce as founders of new groups. This extreme course was actually adopted at some point in the distant past by colonies of cells which agglomerated into organisms; it is this mechanism (known to biologists as the "Weismannian barrier" between germ and soma cells) which explains why organisms evolve as wholes rather than the cells within a single organism evolving in competition against each another: see Leo W. Buss, The Evolution of Individuality (Princeton: Princeton University Press, 1987). The other postulated mechanism which has been proposed as a basis for group selection in biology is for some trait to be so effectively "frozen in" within a group (e.g., within a species or higher taxonomic level) that it is not subject to variation and selection among the individuals within the group. The most plausible exemplar of this mechanism is sexual reproduction. In many species, sexual reproduction is disadvantageous at the level of the individual (the female tends to bear a disproportionate cost compared to the benefit received); sexual reproduction does, however, tend to speed up the process of evolution dramatically and so may tend to increase the fitness of the species as a whole.

It is difficult to imagine situations in which either of the two mechanisms proposed within biology could lead to group selection in a social or cultural context; no other mechanisms which will plausibly lead to group selection are known.

14. "There can be no doubt that our innate moral emotions and instincts were acquired in the hundreds of thousands of years-- probably half a million years--in which Homo Sapiens lived in small hunting and gathering groups and developed a physiological constitution which governed his innate instincts...For the small hunting and gathering band, consisting of twenty-five to fifty people, there were two overriding moral conceptions which today we describe with the terms 'solidarity' and 'altruism...It is these two instincts, deeply embedded in our purely instinctive or intuitive reactions, which remained the great obstacle to the development of the modern economy." Friedrich A. Hayek, Knowledge, Evolution, and Society (London: Adam Smith Institute, 1983), pp. 29-31.

15. For a recent presentation of Buchanan's views, see Geoffrey Brennan and James M. Buchanan, The Reason of Rules: Constitutional Political Economy (Cambridge: Cambridge University Press, 1985). Also see James M. Buchanan, The Limits of Liberty (Chicago: University of Chicago Press, 1975) and James M. Buchanan and Gordon Tullock, The Calculus of Consent (Ann Arbor: University of Michigan Press, 1962). Note that Buchanan's group of constitutionalists and Tullock's group of Hobbesian analysts who were described earlier are largely the same group of people: constitutionalism is the group's answer to the Hobbesian dilemma.

17. For a discussion of community in individualist societies, see Richard P. Hiskes, Community Without Coercion: Getting Along in the Minimal State (Newark: University of Delaware Press, 1982)

18. One of the serious problems with Robert Nozick's concept of a free society as being a framework for socially isolated and competing utopian communities lies in Nozick's failure to consider what overarching structure of community is needed to maintain the framework as a whole, Robert Nozick, Anarchy, State, and Utopia, (New York: Basic Books, 1974), pp. 297-334. Fortunately, while any free society must allow utopian subcommunities, such as Nozick discusses, to exist within itself, historical experience suggests that most people will choose to be part of the general social community rather than narrowly limiting themselves to participation only in one of the subcommunities.

19. While statists' arguments are generally based solely on consequential concerns, such as we have been considering, anarchists generally appeal both to consequential arguments and to the moral argument that any state is necessarily a violator of fundamental human rights. While we agree that any state which consistently respected human rights would differ radically from all existing states, we do not think such a rights-respecting state is a logical contradiction. However, we do expect that an ultraminimal, rights-respecting state would tend to be unstable, either tending to grow into a more encompassing rights-violating state or, on the other hand, tending to dissolve itself into a free-market anarchy. Cf. Murray N. Rothbard, The Ethics of Liberty (Atlantic Highlands, N.J.: Humanities Press, 1982); David Friedman, The Machinery of Freedom (2nd ed., LaSalle, Ill.: Open Court, 1989).

20. Murray N. Rothbard has eloquently made the point that only a passion for liberty and justice, not utilitarian self-interest, can in fact motivate people to create and maintain a societal structure which respects individual liberty: see his "Why Be Libertarian?" in his Egalitarianism As A Revolt Against Nature and Other Essays (Washington, D.C.: Libertarian Review, 1974) pp. 147-151.

21. David H. Miller, "Courts As Certification Agencies: The Role of the Judiciary in a Free Society" (unpublished, 1990).